To be deductible, the tax must be imposed on the taxpayer and must have been paid during the current tax year. However, tables are available to determine your state and local general sales tax amount for the current tax year. Taxes may be claimed only as an itemized deduction on Schedule A, Form 1040.
The deduction for state and local taxes paid to include state income tax, general sales tax, real estate tax and personal property tax is limited to $10,000 ($5,000 if married filing separately).
State & Local Tax from W-2s, 1099s, Estimates - The program pulls this amount from withholdings reported on Form W-2, Form W-2G, Form 1099-G, Form 1099-R, Form 1099-MISC, and State Estimated Payments.
Additional State & Local Income Tax - Enter the amount of state and local income taxes paid for a prior year, such as taxes paid with your prior year state or local income tax return. Do not include penalties or interest.
Prior Year State Amount Due - If an amount was due from the prior year tax return and if the prior year return was done in the program, an amount will pull to this field. If this amount was actually submitted with the return, no adjustment is necessary. An amount can also be entered in this field to reflect any amount that was actually paid with the prior year return.
Prior Year 4th Qtr Estimates paid after 12/31 - The program will pull the amount of state estimated payments entered in the prior year program that were paid after 12/31. You may adjust the amount in this field, or if you did not enter the amount in the prior year program you may input the amount here.
Total State & Local Income Tax - The program calculates the total state & local income tax of the entries above.
Real Estate Taxes - Real estate taxes are deductible as itemized deductions only if the taxpayer owns the real estate and the taxes are based on the assessed value of the property. If a mortgage company pays the taxes from an escrow account, deduct the taxes actually paid on behalf of the taxpayer, not the amount the taxpayer paid into escrow. Unlike mortgage interest, the real estate tax deduction is not limited to the first two homes owned by the taxpayer.
Foreign taxes paid on real estate are no longer deductible.
Real Estate Taxes Carried from Form 8829/BUOH - Unused portions of certain expenses can be used as an itemized deduction. To review additional information about Business Use of Home, click here.
Personal Property Taxes - Personal property taxes are deductible if based on value alone and are charged on a yearly basis.
Other Taxes - Enter the amount of other deductible taxes the taxpayer paid during the year. Other deductible taxes includes taxes paid to a foreign country (if the foreign tax credit was not claimed), and generation skipping tax (GST) imposed on certain income distributions.
Total Taxes You Paid - The program calculates the total of all the entries above.